NHS told: freeze all Microsoft spend

The Cabinet Office is halting all but emergency purchases of Microsoft software in the NHS as it negotiates a pan-government procurement deal with the software giant.

The Crown Representative, headed by former Micro Focus CEO Stephen Kelly – appointed by Cabinet Office minister Francis Maude in April – is leading talks with 20 of the largest suppliers to the public sector, including HP and IBM.

Efforts to cut a deal with Microsoft are happening now, Kelly confirmed in letters sent to NHS Trusts mid-June, leaked to The Register by sources.

"It is my intention to develop a commercial arrangement with Microsoft which will provide better commercial terms; reduced cost and add greater flexibility," said Kelly.

"The focus of the government in its engagement with strategic suppliers is to act with one voice to secure the most favourable terms, therefore I ask for your continued support during this process and that you refrain from non-business critical spend with Microsoft until a new commercial arrangement is secured."

The Coalition canned an Enterprise Wide Agreement (EWA) with Microsoft worth £80m over three years covering the NHS after the election last summer, citing a lack of business case or budget to justify the renewal.

Local NHS Trusts were handed control over budgets and software compliance but as previously revealed, sources said the complexities of divvying up licence allocation and capital budgets from the central pool delayed the process.

In the letter, Kelly said he was aware that Microsoft had contacted Trusts regarding "potential purchases" but he urged procurement heads to contact Trisha Trough in the Cabinet Office or Alistair Price at Buying Solutions before placing orders.

"It is imperative that Her Majesty's customers scrutinise their requirements before embarking upon new arrangements with Microsoft," the letter stated.

This led to a deluge of requests from Trusts and Kelly then issued another correspondence days later, directing them to contact Connecting for Health, the Department for Health's Informatics arm.

In a statement, Microsoft general manager for the public sector Dr Nicola Hodson said that Redmond was building on the PSA09 – the software-purchasing model recently formed with the UK public sector – to drive "better value for money, greater choice and flexibility in the licensing of enterprise software."

A Cabinet Office spokeswoman told El Reg that the government is "taking a strategic approach to major suppliers to ensure that it acts effectively as a "single client".

This exercise is surfacing in the police sector as well, with Home Secretary Theresa May this week lifting the covers off plans to develop a police led ICT company to lead procurement across all 43 forces.